His position in this role was short lived, however. Following the second resignation of David Blunkett, Hutton was appointed as his replacement in the role of Secretary of State for Work and Pensions on 2 November 2005. Hutton was seen as one of Tony Blair's closest supporters but survived in cabinet following Blair's resignation in June 2007 and was moved by new Prime Minister Gordon Brown to be Secretary of State for Business, Enterprise and Regulatory Reform, which incorporated the bulk of portfolios from the now dissolved Department of Trade and Industry, including Energy security issues which many had expected to be ceded to DEFRA.

He was moved into the role of Secretary of State for Defence in the cabinet reshuffle on 3 October 2008. On 5 June 2009, Hutton resigned his Cabinet position and announced his intention to stand down as an MP at the next general election.[4]

On 27 June 2010, he was created a life peer as Baron Hutton of Furness, of Aldingham in the County of Cumbria, and was introduced in the House of Lords on 1 July 2010,[6] where he sits on the Labour benches.

It was also announced in June 2010, that the Conservative – Lib Dem coalition had asked him to head a commission into public sector pensions.[8] His initial report was published in October 2010.[9] The final report was published in March 2011.[10] On 19 June 2011, Hutton rejected claims by trade unionists and Labour colleagues that he had been used as a 'stooge' by the government and dismissed speculation regarding his motives for accepting the coalition's invitation.[11]

In 2008 John Hutton's first book was published, a non-fiction book with the title Kitchener's Men – The King's Own Royal Lancasters on the Western Front 1915–18.[13] In it, Hutton gives a "graphic insight into the daily routine and grim reality of warfare on the Western Front for men who were mostly recruited from the Furness area of the North-West. This was followed in 2010 by 'August 1914, Surrender at St. Quentin'.[14]

He has also co-authored the book 'How to be a minister – a 21st-century guide' with Sir Leigh Lewis. It was published in September 2014.[15]